How The Nevada Controller Is Getting Her State Financially 'Healthy'

At CFO Insights, we often focus on the evolution of the role of the CFO in businesses and non-profits, but changes are happening in government, too – and Nevada is leading the way in the United States. I spoke with the Honorable Kim Wallin, CMA, CPA, CFM about the changes she has implemented during her eight year tenure as Nevada State Controller.

This interview has been edited and condensed.

Jeff Thomson: There’s a lot of talk about the evolving role of CFOs and controllers in the corporate world. How would you describe that phenomenon in governmental accounting and specifically in your office as the controller of the state of Nevada?

Kim Wallin: We have huge silos in our state. So, if the CFO, which in Nevada is the controller, is to be a strategic partner, you have to break down those silos. That’s something that we’ve been working on since I came into this office: collaboration. We’re starting to get people to look at the whole picture and where do we want to go and where should we be.

Because our legislature has not had a professional controller in the past, it never had an accountant, CPA, CMA in the controller office. Now, the legislature actually comes to the controller office to ask for advice on whether we should be doing a program or where the financial pitfalls are.

I’ll give you an example. Right now, we are working on a possible big highway project in Las Vegas and the project started out as a $350 million project. Now, it’s probably over a $1 billion dollar project and the legislature is coming to me saying, “Can we do this? How can we do the financing for it? Is it going to work?” We are starting to take a more active role.

Thomson: You were one of the forerunners in applying XBRL inside state government. What would you describe as the challenges in implementing XBRL and achieving ROI?

Wallin: I saw that it had so much potential. In government, we have so many old legacy systems that don’t talk to each other. It’s hard to get your data out, and it’s hard to do your reporting. I thought, “This is a perfect place to use XBRL.”

One of the areas I saw it would work was in the grant reporting area. We did a pilot very early on with the Department of Agriculture to see if they could do monthly reporting of their grants, and it worked. Then, nothing happened because we were trying to standardize grant reporting, which the federal government is finally starting to do with the Data Act.

We just became live in our single audit reporting and grant reporting and have automated that process. Now, we’re actually able to generate every single agency’s single audit report from our statewide accounting system. All they have to do is review it and verify that it’s correct. We don’t have to do anything else, so we can spend more time doing more analytical work on it, rather than cutting and pasting.

Thomson: Did you have any obstacles in implementing XBRL?

Wallin: This is where the government attitude of, “This is the way we’ve always done it” comes in. One agency asked if they could have an exemption from doing it automatically this year. We asked, “Why?” and they said, “Well, we haven’t been using our job numbers to delineate what expenditures are going to what grants. We’ve been doing it this way for 20 years!” And we told them, “No, you have to do it this way.”

Some of the other hindrances I had in implementing XBRL were in the IT area. People weren’t up to date on it; they didn’t understand it. I have a really good IT staff now that is open to change, open to doing things differently and trying new things. I’m excited about it.

Thomson: But I think that’s a perfect example of a leading-edge, strategic controller using technology to focus on the important things. Reporting is very important, but we want to free up time to provide insights to constituents. In your case, the residents are part of your constituencies.

Wallin:Nevada just went through a benchmarking study. We benchmarked in four different areas: IT, HR, procurements and finance. It’s the precursor to us getting a new enterprise resource planning (ERP) system. In that benchmarking study, we found we had something like four or five times more full-time equivalents than our peers in the financial area because we do so many things manually. We have a great opportunity to change that. One of the next steps that we’re putting forward in the controller’s office and throughout the state is to do reprocess engineering and look at our processes to automate them.